- Mills cut list prices for early-July sales
- Trade prices drop to one-year low
- Buyers continue need based purchasing
- Chinese heavy plate (SS400) FOB prices match end March 2021 levels
India’s major hot-rolled (HR) plate producers announced their list prices for early-July despatches earlier this week, lower from the levels of early-June. The revised HR plate (E250, 20-40mm) plate prices from a public sector unit (PSU) major stands at around INR 63,500/t ($803/t), while those from the private plate maker JSPL are at INR 65,000/t ($823/t). Prices are on an exy-Mumbai, excluding GST @ 18%.
Low demand base in both overseas and domestic markets amidst falling plate prices have been the major reason behind the decline in prices from steel makers.
However, trade segment prices of hot-rolled (HR) plates stood firm this week. SteelMint’s weekly assessment for HR-plates (E250, 5-10mm) continued hovering at around INR 60,500-61,500/t ($765-777/t) exy-Mumbai, which are higher compared to INR 60,250-60,500/t ($761-765/t) assessed on 8 April 2021, as per SteelMint records.
Plates (E250, 20-40mm) prices were assessed at INR 63,500-64,500/t ($803-815/t) exy-Mumbai this week, unchanged w-o-w. Mentioned prices are basic, and exclude GST at 18%
Major factors impacting the market sentiments-
1. Decline in raw material prices
The decline in raw material prices such as iron ore and coking coal is another factor keeping buyers and sellers in the distribution network concerned.
SteelMint’s benchmark Odisha iron ore fines (Fe62%) index has slipped to INR 3,100/tonne (t) ex-mines (including royalty and other statutory cesses) on 25 June 2022. This is nearly the lowest level in two years. Furthermore, the index has fallen from over INR 6,000/t in the February-March. However, prices have edged up to INR 3,200/t as on 2 July 2022 as an increase in sponge and pellet prices this week resulted in an increase in fines prices.
Also, Australian premium hard coking coal (HCC) prices are assessed at $258/t FOB on 8 July 2022, moving down consistently from $302/t on 4 July. On a weekly comparison, these have declined by about $31/t to $283/t FOB with one working day in hand this week, compared with the previous week’s $314/t FOB. Also, the imported Australian premium HCC prices have fallen to $309/t CNF India from $341/t a week back.
2. Decline in global plate prices weighs on sentiments
The domestic buyers are also keeping tabs on global plate prices, another factor that is impacting the buying interest. Chinese heavy plates (SS400) export offers have further declined to $710-720/t FOB basis this week, as against the previous week’s $720-740/t FOB levels. Prices have come at par with the levels last seen in end-March 2021, as per data maintained with SteelMint.
3. Buyers cautious, booking as per need only
The continual decline in trade market prices since early April 2022 has made both end-buyers and distribution channel partners skeptical. Thus none of them are trying to build up inventories or purchase in bulk quantities.
“Low volume purchases by end-users has been a major reason behind the slump in restocking demand. Moreover, buyers continue to book in small lots to avoid any losses arising out of the decline in prices,” said major distributors from western India.
Also the overseas trade volumes and prices have been on a downtrend in the aftermath of slapping of export duty on non-alloyed flat steel products. This is another factor weighing on the buying interest from both trade channel partners and end-buyers.
Near-term outlook
With the recent disruptions in the trade activities after export duty imposition and the arrival of monsoon, buyers are likely to remain cautious and continue booking in lower volumes. Moreover, the drop in demand from the major plates consuming sectors of infrastructure and construction will get partially offset by the recent improvement in demand from other businesses such as fabricators and heavy machinery segment. Also, the mills are looking forward to undertake maintenance shutdowns a couple of months ahead of their normal schedule, which is likely to balance the demand-supply gap and provide support to prices in the near term.
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